Rand retreats as yuan devaluation weighs

08/14/2015

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The rand has fallen close to 5 percent in the last month against the dollar and over 4 percent against the pound and the euro in the same period.The hand of Former South African Reserve Bank Governor Gill Marcus is seen holding South Africa's new rand banknotes - which feature an image of former president Nelson Mandela on the front in a file photo. REUTERS/Siphiwe Sibeko

The rand slipped over half a percent against the dollar on Thursday as the devaluation of China's yuan continued to strain South Africa's currency.

At 1540 GMT the rand had slipped 0.51 percent to 12.8230 per dollar, failing to hold on to earlier gains that saw it touch a session high of 12.7200.

"Looking at the price behaviour of the rand recently, it looks predisposed to further weakness. And a lot of the volatility is coming from the Chinese story," said Mohammed Nalla, head of research at Nedbank.

Emerging market currencies found some relief as the decline in the yuan slowed and on signals from China's central bank suggesting that it would not allow the currency to fall further, but the rand bucked the trend.

Yields on government bonds were mostly up, with the benchmark paper due in 2026 adding 0.5 basis points to 8.155 percent.